Board priorities in 2022
23 February 2022
2022 will be another year when companies are under stress from issues, both macro-economic and geo-political, which are largely beyond their control. How boards prepare their response will determine the extent of their success. Our global governance and ESG experts pick their top three governance priorities and trends for Boards to consider, and address, this year.
Will Chalk, London
Will has spent the last 20 years providing corporate governance and compliance advice to UK listed, AIM and larger private companies. He is a Partner in Ashurst’s London Corporate team and heads the governance offering in the UK.
| 1. The post-pandemic reset | 2. esg disputes and activism | 3. dust off your takeover defence manual |
|---|---|---|
Emerging from the pandemic nearly all corporate strategies have been adapted, and many business models have changed significantly. Purpose and values need to be reassessed in that light and culture, particularly as it manifests itself internally, must be carefully re-evaluated. Do purpose, values and strategy continue to align with culture? Those who find they do not may find themselves disproportionately impacted by the 'great resignation', particularly in sectors where employees have spent the last two years proving they can work (and work well) for anyone from anywhere. | Prepare for ESG-inspired disputes and activism and consider whether the board has the skills and data (or access to both) to deal with it. | With M&A showing no sign of slowing down, it pays to be prepared. And the link between defence, governance and activism has never been stronger. |
Florian Drinhausen, Frankfurt
Florian provides corporate and governance advice to large private and listed companies. He was Chief Governance Officer of Deutsche Bank with responsibility for corporate governance globally. He is a Corporate Partner in Ashurst's Frankfurt office and heads the governance offering in Germany.
| 1. Managing reputational risk in the age of the 24 hour news cycle | 2. esg-related reporting | 3. the governance of risk |
|---|---|---|
| Corporate reputations, and share prices, take years to build but only minutes to dismantle. In a 24 hour news cycle and with a heightened focus on the role of business in society, managing reputational risk must be high on every board's agenda. Companies which can demonstrate a strong risk culture and robust processes to manage reputational risks will enjoy a competitive advantage. | ESG-related reporting is becoming ever more sophisticated and companies need to prepare to fulfil detailed reporting requirements and deal with shareholder activism on ESG-related issues. | Ensuring efficient but robust corporate governance to manage a multitude of risks will become ever more important. |
Joshua Smith, Sydney
Joshua has been a trusted advisor to the Chairs, Boards and CEOs of Australasia's largest companies, on issues related to governance, leadership and performance, for close to two decades. Joshua is a Partner and Head of Board Advisory. He is based in Sydney.
| 1. Net zero, climate change and energy transition – the 'E' in ESG | 2. Digitisation | 3. social licence, reputation and brand - the 's' in ESG |
|---|---|---|
It is clear that the environment has arrived as a critical issue for large listed companies and their boards. Net zero, climate change and energy transition are unquestionably among the top issues of the day. It has taken decades for this to occur. At last there is recognition that we must all act to secure the future, ours and those who follow us. Those companies who can demonstrate, through both words and actions, a strong commitment to these issues, stand to gain a significant competitive advantage, positioning them for the future. | Technology, Digitisation, Data, Convergence and Cybersecurity - key issues for any large company to secure its future and mitigate disruption. | Social licence to operate is vital to long term sustainability. Reputation and brand can take decades to build, but can be destroyed in an instant. |
Anna-Marie Slot, London/Hong Kong
Anna-Marie is Global ESG/Sustainability Partner and the Global Head of High Yield at Ashurst with over two decades of experience acting for investment banks and companies. Anna-Marie splits her time between London and Hong Kong.
| 1. Sustainability risk and opportunities analysis | 2. act now on sustainability | 3. be aware of greenwashing and litigation risks |
|---|---|---|
This is the year to get serious about the risks and opportunities that ESG considerations bring to a business and its business model. Boards need to add climate change, net zero commitments, supply chain and diversity, together with any other aspects of E, S or G that are material to their agendas, and keep them there. Upskilling on the challenges that the business is facing as well as the opportunities that are being created by the increasing focus on ESG are key to this year's to do list. | Avoid silo thinking by making sure you set two to three year interim ESG-related goals as well those for the longer term. | Being aware of, and being able to substantiate, your ESG commitments – greenwashing claims and litigation risks are on the rise. |
Rob Hanley, Sydney/London
Rob advises listed and larger private companies on a wide range of strategic corporate governance matters and regulatory requirements as well as current and emerging risks. Rob leads the Legal Governance Advisory practice in Australia. He also practises, and continues to spend considerable time, in London.
| 1. The rise of ransomware | 2. sustainability targets | 3. daos (decentralised autonomous organisations) |
|---|---|---|
As ransomware incidents become more frequent, directors are faced with difficult decisions balancing their duties to all stakeholders. The question, to pay or not to pay, is an immediate problem. Ahead of legislative changes that provide clarity on the legality of making ransomware payments, directors need to be actively preparing and discussing how to react to a ransomware demand. Directors play an essential role in assessing "whole of company" readiness., in stress-testing the assumptions used in recovery planning, in setting their company's recovery priorities, and in determining how effective a ransomware payment might be in meeting recovery objectives. | Liability implications and the risk of claims for 'greenwashing' | Could the clever technology underpinning cryptocurrency, the blockchain, disrupt traditional governance structures? |
Elena Lambros, Sydney
Elena leads our Risk Advisory's ESG practice and provides specialist risk advisory services, optimising risk strategy and facilitating consistent risk-based decision-making to support the achievement of client strategic objectives.
| 1. ESG Risk Management to support strategy execution | 2. robus climate risk transition plans | 3. social licence |
|---|---|---|
| Organisations must now anticipate and ensure compliance during a time of changing regulatory frameworks, and assess the risks and opportunities driven by the growing importance of social licence and environmental custodianship. | Align on key points of consideration, expertise insights, and process and plan for climate transition risk approach and scope. | Social licence to operate is a risk class of its own and should be managed and integrated purposefully within an enterprise risk management framework. |
